Endless Mergers... More to Come! (CBST, ADLR, HS, CI, CVH, MAT, RNOW, ORCL, SLE, SJM, ANDS, NYX)

Monday is called “Merger Monday” for a reason and this morning is a classic example of its namesake.  We have seen multiple deals and news outstanding on pending deals.  We recently noted that far too many companies in technology have been rumored as takeover targets, and not a single one of the deals announced was in the most recent technology rumor mill.

Cubist Pharmaceuticals Inc. (NASDAQ: CBST) is pulling a rabbit out of its hat.  Cubist was once believed to be a solid acquisition candidate when its share price was much lower, but now the company has come out and announced that it is acquiring Adolor Corporation (NASDAQ: ADLR) for about $190 million in a deal that could rise to $225 million if certain milestones are achieved. Adolor loves the price as the shares are up 129% at $4.40 today.  That is above the $4.25 buyout price, but the possible upside for the milestones is why.

HealthSpring Inc. (NYSE: HS) is being acquired for $3.8 billion by CIGNA Corporation (NYSE: CI) in a $55 buyout offer in close to a 35% premium.  Insurers continue to consolidate.  Elsewhere in healthcare, Coventry Health Care Inc. (NYSE: CVH) was listed as one which could be acquired by Barron’s over the weekend and its shares are up almost 6% at $31.66 in conjunction with healthcare consolidation news and on hopes for more pin action.

Mattel Inc. (NYSE: MAT) is acquiring HIT Entertainment in a $680 million acquisition from Apax Partners and a private equity consortium.  Mattel’s market cap is $9.6 billion.  The deal locks up the Thomas & Friends toys.

Rightnow Technologies Inc. (NASDAQ: RNOW) is much more well known “right now” since Oracle Corporation (NASDAQ: ORCL) has announced a buyout of the company.  This $1.5 billion purchase comes to $43.00 per share and the stock hit a new all-time high of $42.92.  RightNow is in cloud-based customer experience software products and services.

Sara Lee Corporation (NYSE: SLE) is a company that has been a rumored (and hoped for) buyout target for longer than one can easily recall in the food sector.  The company is selling off the majority of its food service coffee and tea operations to J.M. Smucker Co. (NYSE: SJM) for about $350 million.  Considering it is a $10.5 billion company by market capitalization, this is no real game-changer.

Elsewhere in M&A news, Anadys Pharmaceuticals Inc. (NASDAQ: ANDS) is at a year high of $3.68 and it now has a formal class action suit filed against the merger where Roche is set to pay out $3.70 per share. This was a $10 and higher stock in 2006.

NYSE Euronext, Inc. (NYSE: NYX) and its Deutsche Bourse merger is still hanging in the wind.  The merger has a hearing in the European Union on October 27 to address some of the concerns brought up by regulators.  At $26.70 today, this is way down from the highs above $41.00 over the last year.

JON C. OGG